New Strategy for Taiwan Foreign Currency Exchange: Yen vs. Korean Won, Which Is the Most Cost-Effective Choice?

As 2025 comes to an end, the fluctuations in the Taiwan dollar exchange rate are becoming more and more significant. Converting foreign currency is no longer just a routine before going abroad but has become an important decision in asset allocation. Today, we not only analyze the four main channels for exchanging Japanese Yen but also compare them with Korean Won, helping you understand why, despite both being Asian currencies, the choices differ greatly.

Japanese Yen vs Korean Won: Why Do Taiwanese Still Prefer Yen?

When it comes to exchanging foreign currency in Taiwan, Yen has always held the top spot. But in recent years, Korean Won has gradually become an option. What are the differences between the two?

The Triple Identity of Yen: Living + Investment + Hedging

Yen is not just a simple travel currency. On a daily basis, traveling to Japan, purchasing Japanese goods, studying or working abroad in Japan all require Yen; from a financial perspective, Yen is one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc), with funds flowing into Yen during global stock market turbulence. During the Russia-Ukraine conflict in 2022, Yen appreciated by 8% in a single week, while global stock markets fell by 10%, exemplifying its hedging value.

Moreover, the policies of the Bank of Japan influence the global market. In December 2025, BOJ Governor Ueda Kazuo signaled a hawkish stance, with market expectations of interest rate hikes reaching a 30-year high of 0.75%, and Japanese government bond yields hitting a 17-year high of 1.93%. Under this policy environment, Yen exchange rates are relatively stable, making it suitable for risk-averse investors.

Korean Won’s Limitations: Mainly for Travel

Korean Won is primarily used for travel to Korea, shopping, and beauty product purchases. Although South Korea’s tech industry is advanced, Won lacks hedging properties and is more susceptible to domestic economic fluctuations. Additionally, Won’s volatility is larger than Yen’s, making long-term holding riskier.

Deep Comparison of 4 Main Channels for Exchanging Yen in Taiwan

Many people mistakenly think there is only one way to exchange currency, but in reality, the difference in exchange rates alone can be NT$1,500-2,000. Based on the latest data as of December 2025, we will analyze each of the four channels.

First Choice: Online Exchange + Airport Pickup — Lowest Cost

This is our most recommended method, especially for those planning to go abroad.

The process is simple: log into the bank’s website, fill in the remittance amount, select the pickup branch and date. After completing the online exchange, bring your ID and transaction notification to the counter for pickup. Taiwan Bank’s “Easy Purchase” service has no handling fee (pay NT$10 via Taiwan Pay), and the exchange rate is about 0.5% better than cash selling rate. Taoyuan Airport has 14 Taiwan Bank branches (including 2 24-hour branches), making airport pickup very convenient before departure.

Cost estimate: For NT$50,000, the online exchange rate is about 4.87, which can exchange approximately 243,500 Yen. After deducting fees, the estimated loss is only NT$300-800, making it the lowest-cost option among all.

Advantages: Better exchange rate, often no handling fee, designated airport pickup, 24-hour reservation
Disadvantages: Need to book in advance (at least 1-3 days prior), pickup time limited by bank hours
Suitable for: Travelers with strong planning, those deciding 1-2 weeks before departure

Second Choice: Foreign Currency ATM — Instant and Flexible

For urgent needs, foreign currency ATMs are a lifesaver. Using a chip-enabled debit/credit card, you can withdraw Yen from foreign currency ATMs outside banks, available 24/7. The cross-bank withdrawal fee is NT$5, deducted directly from your TWD account, with no additional currency exchange fee. Mega International Bank’s foreign currency ATMs allow withdrawals of Yen equivalent to NT$150,000 per day from TWD accounts.

The only consideration is limited locations (about 200 nationwide), and cash may run out during peak times. Airport ATMs usually have sufficient supply, but suburban ATMs outside airports may run out of cash. Estimated cost for NT$50,000 exchange is NT$800-1,200.

Advantages: Instant withdrawal, 24/7 availability, low cross-bank fee, no currency exchange fee
Disadvantages: Limited locations, fixed denominations (1000/5000/10000 Yen), possible cash shortages during peak times
Suitable for: Urgent needs, those who cannot visit bank branches, last-minute travelers

Third Choice: Online Exchange + Counter Pickup — Investment-Oriented

Suitable for those with foreign exchange accounts who want to hold Yen long-term or invest. Transfer NT$ to Yen via online banking or app, and deposit into a foreign currency account, using the “spot sell rate” (about 1% better than cash selling). If cash is needed, withdraw in person or via foreign currency ATM, but this incurs a spread fee (from NT$100).

This method allows for staged entry based on exchange rate trends. For example, when NT$ to Yen drops below 4.80, you can buy in stages to average the cost. Additionally, instead of withdrawing cash, keeping funds in a foreign currency account enables investment in Yen fixed deposits (current annual interest rate around 1.5-1.8%) or Yen insurance policies (guaranteed interest rate 2-3%).

Cost estimate: NT$50,000 exchange costs NT$500-1,000.

Advantages: 24/7 operation, staged averaging, better exchange rate, potential for ongoing investment
Disadvantages: Need to open a foreign currency account first, withdrawal fees, higher entry barrier
Suitable for: Experienced forex investors, long-term holders, those wanting to invest in Yen deposits or financial products

Fourth Choice: In-Person Bank Cash Exchange — Backup Option

This is the most traditional but also the most expensive method. Carry cash to a bank branch or airport counter to exchange for Yen cash, using the “cash selling rate” (about 1-2% worse than spot rate). For example, Taiwan Bank’s cash selling rate on December 10, 2025, was about 4.85 (NT$1 = 4.85 Yen).

Some banks also charge fixed handling fees, e.g., E.Sun Bank and Cathay United Bank charge NT$100-200 per transaction. With both the spread and handling fee, NT$50,000 exchange costs can reach NT$1,500-2,000, about 3% of the total amount.

Advantages: Safe, full denominations, assistance from staff, no prior reservation needed
Disadvantages: Worst exchange rate, higher fees, limited to bank hours (weekday 9:00-15:30)
Suitable for: Those unfamiliar with online procedures, small urgent exchanges (e.g., at the airport)

Summary of 4 Methods Cost Overview

Estimated for NT$50,000 exchange (December 2025 data):

Is it a Good Time to Exchange Yen Now? Exchange Rate Analysis and Timing

On December 10, 2025, the Taiwan dollar to Yen rate was about 4.85, meaning NT$1 = 4.85 Yen. Compared to the start of the year at 4.46, this is an appreciation of about 8.7%, making the exchange quite favorable for Taiwanese investors.

Short-term Fluctuation Opportunities

Yen is currently volatile. The US is entering a rate-cut cycle, which supports a weaker USD and thus a stronger Yen; meanwhile, the Bank of Japan is on the verge of raising interest rates. USD/JPY has fallen from a high of 160 at the start of the year to around 154.58 now. Short-term fluctuations may bring it back to 155, but medium to long-term forecasts suggest it could fall below 150, which is advantageous for NT$ to Yen exchange.

Data shows that in the second half of the year, Taiwan’s demand for currency exchange increased by 25%, mainly driven by the recovery in travel (Japan’s visa issuance increased by 30% year-over-year) and hedging needs (institutional investors increased Yen asset allocation by 2%).

Staged vs Lump-Sum Exchange

For small travel needs (NT$50,000-200,000), a combined strategy of “online exchange + ATM” is recommended: first, exchange about 70% online, then pick up at the airport; the remaining 30% can be supplemented via ATM as needed. This ensures favorable exchange rates while maintaining flexibility.

For investment purposes, it is advisable to enter 3-4 times, exchanging NT$10,000-20,000 each month to average costs. Based on technical analysis, the short-term support level for Yen is around 154.2 (last month’s low). If NT$ to Yen drops below 4.75, it is an excellent entry point.

Post-Exchange Yen Asset Growth Paths

After exchanging Yen, don’t let your money sit idle without interest. Taiwanese investors have four main options:

1. Yen Fixed Deposit — Steady Returns

Open a foreign currency account with banks like E.Sun or Taiwan Bank, deposit Yen online, with a minimum of 10,000 Yen. Annual interest rate is about 1.5-1.8%. A 1 million Yen deposit for one year yields about 15,000-18,000 Yen profit, roughly NT$3,000-3,600. Very low risk, suitable for conservative investors.

2. Yen Insurance Policies — Medium-term Lock-in

Cathay and Fubon Life offer Yen-denominated savings insurance with guaranteed interest rates of 2-3%, typically for 5-10 years. Slightly higher than fixed deposit rates but less liquid. Suitable for funds not needed within 5 years.

3. Yen ETFs — Growth Allocation

Yuanta 00675U (Yen exchange rate index futures trust) and similar products are available as fractional shares through Taiwan brokers. Track Yen appreciation relative to other major currencies, with an annual management fee of 0.4%. Suitable for dollar-cost averaging and diversification.

4. Yen Forex Trading — Swing Profits

Trade USD/JPY or EUR/JPY directly on forex platforms. Advantages include long/short positions, 24-hour trading, and flexible leverage. Risks are high; requires basic forex knowledge, not suitable for beginners.

Quick FAQs

Q: What’s the difference between cash rate and spot rate?

Cash rate is the buy/sell rate banks offer for physical cash (banknotes/coins), with the advantage of immediate delivery but usually 1-2% worse than spot. Spot rate is the market rate for T+2 settlement, mainly for electronic transfers, offering better rates but requiring waiting. In short, cash is more expensive, spot is cheaper.

Q: How much Yen can I get for NT$10,000?

Calculation: Yen amount = NT$ amount × current rate(TWD/JPY)

For example, on December 10, 2025, Taiwan Bank’s cash selling rate was 4.85, so NT$10,000 ≈ 48,500 Yen. Using spot rate 4.87, about 48,700 Yen, difference of 200 Yen (~NT$40).

Q: What do I need to bring for in-person exchange?

Taiwan residents: ID card + passport; foreigners: passport + residence permit. If pre-booked, bring transaction notification. Minors under 20 need parental consent and accompaniment. For large amounts (over NT$100,000), declare source of funds to prevent money laundering.

Q: Are there withdrawal limits at foreign currency ATMs?

Different banks have different limits. Usually, the daily limit for bank cards is NT$120,000-150,000; other banks may have per-transaction limits of NT$20,000-50,000. From October 2025, many banks have strengthened anti-fraud measures, reducing digital account limits to NT$100,000/day. It’s advisable to split withdrawals to avoid hitting limits.

Summary: Optimal Decision for Yen Exchange

Yen has long surpassed the “pocket money” role and has become an asset with hedging and investment value. Whether you plan to travel to Japan next year or want to allocate assets amid NT$ depreciation, following the principles of “staged exchange + post-exchange investment” can minimize costs and maximize benefits.

For beginners, starting with “Taiwan Bank online exchange + airport pickup” is recommended — the lowest cost and simplest process. After exchanging Yen, choose fixed deposits (1-2 years) or ETF investments (3+ years) based on your timeline. This way, you not only save on travel costs but also add a layer of protection during market volatility.